US stocks are climbing following a surprisingly encouraging update on inflation. The Federal Reserve also gave reassurance that it still sees a cut to interest rates, something Wall Street deeply desires, as likely this year.
For its part, the Federal Reserve kept its main interest rate steady after its latest meeting ended Wednesday afternoon. It said it still needs an accumulation of data showing inflation is sustainably heading toward its 2 per cent target before it lowers the rate, which is at the highest level in more than two decades.
Smaller companies that need to borrow to grow and feel the pinch of higher interest rates more than their larger rivals were leading the market. The smaller stocks in the Russell 2000 index jumped 2.4 per cent. Oracle helped lead Wall Street higher with a jump of 13.1 per cent even though it reported weaker profit for the latest quarter than analysts expected. Financial analysts pointed to strong bookings, including contracts related to artificial-intelligence training.A furore around AI has helped send stocks to records despite worries about high interest rates and the slowdown in the economy that they induce.
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